Thank you Clayton, as you appear to be the only one so far who has responded intelligently. Back to the profit discussion:
You’re forgetting the other half of the foundation: losses and bankruptcy. This is a common mistake. The punditry constantly cite America as “a capitalist nation” but how can we be capitalist when bankers can bet trillions of dollars, keep the profits if their bets pan out but shift the losses onto the public if it turns out they’ve bet wrong.
Think back to your ECON 101 class… what happens when the costs of a decision are borne by another person while the benefits of a decision accrue to the decision-maker?
I agree, America is not a truly capitalist nation, in fact I don’t know of any nation on Earth that is. But that doesn’t refute the fact that profit is so powerful an incentive that businesses will chase after it at any cost. The only consequences for immoral/illegal actions are borne after the fact through litigation. This is especially a problem in public companies, as the boards and executives are detached from the company and any resulting litigation. The only thing keeping the profit-chasing in check in a capitalist economy is, like you said, losses and bankruptcy. Sure, the threat of these would be a powerful limit on profit-chasing in a capitalist society that was populated by only small privately-owned businesses, but it doesn’t work so well on huge multi-national corporations that make everything from toothbrushes to furniture to loans, etc.
“Capitalism seems to assume that the Earth’s natural resources are infinite..”
You seem to be forgetting your ECON classes… capitalism assumes the precise opposite, that most goods are scarce and in short supply relative to the demand for them.
and it relies upon eternal consumption and growth to function.
Capitalism doesn’t rely on eternal consumption, human beings do. We need to eat and be clothed, and so on, in order to be alive at all. Capitalism nowhere depends upon growth that’s a purely modern bastardization of captialist theory"
So the check on limited supply for ANY good is simply pricing? I agree that it does indeed work on renewable resources and manufactured goods. However, oil is another story altogether. No one knows for certain the exact volume the Earth holds, for one. Also, it is literally in 90-95% of everything we use and consume. My concern is that we rely on it so heavily for transportation when it’s used in so many other applications and doesn’t seem to have a readily available substitute. It seems impossible that capitalism could accurately price a non-renewable resource like oil, when the volume is unknown and it is so highly depended upon. I don’t see how “market forces” could do anything but have a knee-jerk reaction once production slows to a snails pace. I would say it’s a dangerous fallacy to simply call over-consumption of oil a “mania.” It is a genuine concern…like I said, not just for energy, but for the world’s food supply.
“In capitalism, wealth is naturally concentrated in the hands of the few.”
“Actually, in mercantilism and mafia-economics, wealth is naturally concentrated in the hands of the few. In capitalism, wealth has no natural tendency to aggregate or dissipate. However, we can see that without the means to aggregate wealth that are employed in the current system (violence, threats of violence), the real wealth concentration in a free society would be much more dispersed and egalitarian.”
I have to disagree with this. Wealth builds upon wealth. This is especially true in capitalism, where companies merge and acquire, overall making strides through technology, supply chain improvements and production efficiencies to overall make products more affordable. This obviously has two sides: cheaper products but the companies are typically owned by fewer people, concentrating the wealth. This also applies to the next section I talked about, inheritance. How is inheritance the “foundational building block of society?” All it appears to do is, like I said, concentrate wealth. A man gets wealthy, then passes it on to his offspring, providing them with a competitive advantage over everyone else who didn’t have rich fathers. The offspring have no real incentive to innovate when they can just run the gifted company, acquire some real estate, build a strip mall, etc and just kick back and relax. Why work hard when your father’s money is making money for you?
“All in all, I believe capitalism has served the world very well, fueling enormous growth and prosperity, some of which has “trickled down” to the little guys. Unfortunately though, it seems it has run its course. Our world faces huge economic problems that I do not believe can be solved by debt-based monetary systems combined with free-market capitalism. I think we, as a world, should go back to the economic drawing board. Please feel free to share your thoughts.”
I agree it would be futile and/or terrifying to do either of the proposed things you said. I wasn’t suggesting either was even possible, just that it’s good to at least discuss these issues. My main point is that we should look back at the very foundations of our economic models. For example, why does profit have to be the incentive? Could we come up with an incentive that would be good for human-kind?